A well-known business in Chapel Hill, NC has filed for reorganization: http://www.newsobserver.com/news/business/article87234457.html
The main focus of the N&O article was that the small suppliers would not be paid (or paid very little) on their accounts receivable from Southern Seasons. While most of the local outstanding debts were from $638 to $4,639….one local supplier was owed $27,799 and another $100,123. Of course, hindsight says don’t let an account get overextended in excess of $100,000!
The secondary focus of the story was what put Southern Seasons into reorganization. The reason seemed to be an expansion plan that wasn’t viable and unable to replicate the success of the Chapel Hill location and a limited on-line presence.
Some key points:
- Maintain the brand recognition.
- Most suppliers will likely supply products in the future – COD.
- Reaffirm the supplier relationship….it is the specialty products that give the brand uniqueness.
- Some smaller suppliers may stop doing businesses with Southern Seasons.
- Management needs to rethink strategic and execution plans.
Many businesses make it through a reorganization….the key to Southern Seasons is to keep its supplier base intact.